KUALA LUMPUR (June 19): PublicInvest Research has downgraded Berjaya Sports Toto Bhd (Btoto) to “Neutral” at RM2.53 with a lower target price of RM2.62 (from RM2.98) after Btoto reported a 51.5% decline in 4QFY18 net profit to RM35.2 million while FY18 net profit was flattish at RM230.5 million.

In a note today, the researh house said stripping out impairment in value for investments and goodwill and other non-operating items, core net profit for FY18 stood at RM260.4 million, accounting for 101% and 98% of house and consensus full-year forecasts respectively.

Hence, it said the results were in line with expectations.

“Headline 4QFY18 net profit was dragged by impairments amounting to RM28.5 million. The increase in operating profit for motor dealership was offset by lower gaming profit due to higher prize payout.

“Btoto declared a higher fourth interim dividend of 4sen per share compared to 3sen per share in 4QFY17. This brings a total dividend distribution of 16sen per share for FY18 (FY17: 14sen), representing a payout ratio of c.94%. 

“We downgrade Btoto to Neutral with a revised target price of RM2.62, as we believe share price has already factored in positive sentiments from post-GE14,” it said.